As India gears up for Union Budget 2025, understanding key financial terms can help decode the policies that shape the economy. Here’s a crisp breakdown of the essential jargon you should know to stay ahead of the curve!
1. Fiscal & Deficit Metrics: The Government’s Financial Health
- Fiscal Deficit – Projected to hover around 5.8% of GDP in FY24, this is the shortfall between government earnings and spending, excluding borrowings.
- Revenue Deficit – When day-to-day expenses exceed revenue intake. India’s revenue deficit is estimated at 2.9% of GDP.
- Capital Expenditure – Investment in infrastructure, roads, and technology. The government allocated ₹10 lakh crore for CapEx in 2024, a 37% jump from the previous year!
- Revenue Expenditure – Spending on salaries, pensions, and subsidies, often viewed as non-growth-driven.
2. Taxation: Where Your Money Goes
- Direct Tax – Income Tax and Corporate Tax. Direct tax collection grew 18.7% YoY in 2024.
- Indirect Tax – GST, Customs, and Excise Duties. GST collections hit ₹1.6 lakh crore in Dec 2024, a sign of rising consumption.
- Capital Gains Tax – Levied on profits from asset sales. Expect potential reforms in Budget 2025.
3. Economy & Monetary Policies: The Big Picture
- GDP Growth – India is projected to grow at 6.5% in FY25, maintaining its status as the fastest-growing major economy.
- Inflation – Consumer inflation stood at 5.1% in Dec 2024, above the RBI’s comfort zone.
- Current Account Deficit (CAD) – India’s CAD narrowed to 1.3% of GDP in Q2 2024 due to robust exports.
- Disinvestment – The government aims to raise ₹60,000 crore from PSU stake sales in 2025.
4. Budget 2025: Policies to Watch
- Subsidies – Will food, fuel, and fertilizer subsidies increase? Current allocation: ₹4.2 lakh crore.
- MNREGA – Rural employment program funding: ₹60,000 crore in 2024.
- PM-KISAN – Farmers receive ₹6,000 annually. Expect possible enhancements this year.
- PDS (Public Distribution System) – Covers 800M+ people with subsidized essentials.
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What This Means for You
Budget 2025 will dictate tax policies, government spending, and economic priorities. Will income tax slabs change? Will GST reforms be introduced? Stay tuned to India Connecting for real-time insights, expert analysis, and breaking updates!
Don’t just watch the budget—understand it, analyze it, and use it to plan your finances smartly!
